Bangladesh’s economy faces major challenges due to the impact of the Middle East war

POBNEWS24, Dhaka Apr 8, 2026 : Bangladesh’s economy faces major challenges due to the impact of the Middle East war. The growth rate has been slow for three consecutive years. Poverty is increasing. High inflation has taken a long-term form. There is a crisis in the banking sector and weakness in revenue collection. The new conflict in the Middle East has made this situation even more fragile. Due to these combined weaknesses, the gross domestic product (GDP) growth in the current fiscal year may fall to 3.9 percent.
A World Bank report titled ‘Bangladesh Development Update’ has highlighted this reality and the growth forecast. The report was released at a press conference at the organization’s Dhaka office on Wednesday. Senior Economist of the Dhaka Office Dhruv Sharma, Divisional Director Jean Pesme, Private Sector Specialist Mague Dia, among others, spoke at the press conference organized at the World Bank’s Dhaka office in Agargaon in the capital.
The report said that the prolonged conflict in the Middle East could have a major impact on Bangladesh, including high inflation, pressure on fiscal spending due to increased fuel subsidies and a weakening current account balance due to high import costs, declining exports and declining remittances. Low foreign exchange reserves, tight fiscal and monetary policies, and a fragile banking sector limit Bangladesh’s ability to absorb prolonged shocks and mitigate their impact on ordinary people (especially the very poor). However, the World Bank said that sustained political stability and rapid progress in structural reforms since the last national elections could help a strong recovery. The report emphasized urgent policy and institutional reforms to restore macroeconomic stability, raise revenue, strengthen the financial sector, and improve the business-friendly environment, so that the country can remain on a path of job creation and inclusive growth.